6 Micron Technology Analysts Bullish On Q2 Earnings, But 1 Remains Bearish Over 'Demand Weakness'

Shares of Micron Technology Inc MU rose in premarket trading on Wednesday, even though the company reported disappointing earnings for the fiscal second quarter.

Morgan Stanley On Micron Technology

Analyst Joseph Moore maintained an Underweight rating and price target of $46.

“The company's ongoing actions, lowering utilization to 75% from 80%, reducing headcount 15% vs. prior 10%, lowering capex from $7.0-7.5 bn to $7.0 bn - all speak to the challenges that the company outlined in February,” Moore said in a note.

“We are reaching the economic point where bad news starts to be good news - as margin declines drive down capex and utilization - and we are seeing calendar 4q as less bad vs. our prior expectations, but demand weakness leaves us oversupplied even with those changes,” he added.

KeyBanc Capital Markets On Micron Technology

Analyst John Vinh reiterated an Overweight rating and price target of $70.

“MU reported results consistent with its negative March 2 preannouncement, while guidance was below expectations given weaker cloud demand, lower pricing, and the impact of underutilization and inventory write-down charges, which increased to $1.1B in FY23 vs. $900M prior,” Vinh wrote in a note.

While expectations for a recovery “keep getting delayed,” there are signs of a bottom, “as a return to sequential rev. growth over the next several qtrs. is expected” he added.

Needham On Micron Technology

Analyst Rajvindra Gill reaffirmed a Buy rating, while raising the price target from $67 to $70.

“Micron reported a bottom-line miss for 2QF23 as inventory charges work their way through the near-term model,” Gill said.

“We see customer inventory being worked down across all end markets, and see margins recovering as inventory charges abate and pricing stabilizes,” the analyst stated. “We think it will take 6-9 months to see a normalized supply-demand environment,” he added.

Check out other analyst stock ratings.

Raymond James On Micron Technology

Analyst Srini Pajjuri maintained an Outperform rating and price target of $70.

“FQ2 inventory write-off of $1.4B was largely in-line with our expectation and management sees an additional $500M write off in FQ3,” Pajjuri said.

“While end demand remains weak, the combination of normalizing customer inventories and aggressive supply cuts should set the stage for a cyclical recovery in 2HCY23,” the analyst wrote. “We are also optimistic that the severity of the current downturn will lead to better supply discipline in the industry going forward,” he added.

Susquehanna On Micron Technology

Analyst Mehdi Hosseini reiterated a Positive rating, while raising the price target from $65 to $90.

“Although the inventory write downs/under utilization charges complicate the N-T margin trends, we highlight return of demand elasticity as lower than expected DRAM/NAND ASPs were equally offset by higher bit shipment,” Hosseini said in a note.

“This is in quite contrast to 1-2 quarters ago when bits were simply not moving despite significant ASP discount,” he added.

Bernstein On Micron Technology

Analyst Mark Li reaffirmed an Outperform rating and price target of $80.

“Micron guided revenue to bottom in 2QFY23 & sequentially improve afterwards,” Li said. “Inventory write-downs weigh on margins now will lower cost later,” he added.

Rosenblatt Securities On Micron Technology

Analyst Hans Mosesmann maintained a Buy rating and price target of $100.

“Micron just called the memory (and semi) cycle bottom,” Mosesmann wrote in a note. “Amid expected severe ASP pressure and alarmingly large inventory write downs, inventories are improving in most end markets and 'bit' demand is improving,” he added.

MU Price Action: Shares of Micron Technology had jumped by 5.58% to $62.59 at the time of publication Wednesday.

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